The fear of the loss of revenues can reduce a firm’s incentive to invest in a drastic (radical in the economic sense) innovation. If a firm holds a near monopoly position in a market, and knows that by investing in a drastic innovation it will accelerate the introduction time of the innovation, it may not want to invest, all else being equal. The incentive changes if the firm knows that by not investing in the innovation, someone else would. For example, Intel’s Pentium was a drastic innovation since it rendered the 486, for the most part, noncompetitive. If Intel had not introduced the Pentium, there is a good chance that its competitors would have introduced a comparable product.

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